1. The Dragon tells Grendel about the theories of the humans. He tells about how they string together random facts and try to make sense of it. When Grendel asks of the Shaper's purpose the Dragon responds that he is there just to preserve the faith in theories when faith has weakened. The Dragon dismisses the ideas of God and tells Grendel that his existence is to propel men forward by being their enemy. This will force them to develop science, literature and art. The final piece of advice that the Dragon gives to Grendel is to "seek out gold and sit on it".
After his visit with the Dragon we find that Grendel is far more existential and nihilistic as a result of the Dragon's interview. Grendel is different because he believes what the Dragon has told him and follows his words exactly.
2. John Gardner feels that the nature of historical events came into being by the spoken word, that Shapers continually kept telling new stories of heroes.
Gardner also believes in heroism, in the form of being a great warrior, speaking formally and being rich. But, Gardner also believes in Inner Heroism. Inner Heroism is fighting for the people, king and God, having death before dishonor and for fame of the culture.
3. Grendel has this epiphany while the bull attacks him in Chapter 2. The bull attacks Grendel without thought, never changing its tactics even though it is getting nowhere with its futile attempts. Grendel suddenly realizes that the world is just like the bull--mindless and destructive without any recognizable plan. Grendel's revelation has a another part as well, which he phrases as "I alone exist." Clearly, Grendel does not literally mean that everything else in the world is just a figment of his imagination.